the WACC rate
Bonds $4,000,000
Preferred Stock $2,000,000
Common Stock $6,000,000
Sell Bonds paying /yr 7% Coupon rate $73.50
Floatation Costs for Bonds 4% of Market Price $1,050
Preferred Stock Paying $2 can be sold for $25
Cost of issuing these shares $3
Common Stock Selling $55 Paid Dividend $3 expect to grow 10%
Floatation Costs for C Stock: $5 /share
Companies Tax Rate 30%
Required Return = Initial Dividend + Growth…
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